Banks want clarification on the switch to the new provisioning system

Even as they evaluate provisioning needs internally, lenders would ask the Reserve Bank of India (RBI) for greater clarification on the proposed anticipated credit loss (ECL) framework.

The RBI published a discussion paper on January 16 about banks’ transition from the incurred-loss methodology to the ECL model.

According to RBI, this would improve the banking system’s resilience and lead to revisions in the current loan-loss criteria.

This news was written by Ms. Pujari Dharani, Research Assistant, All India Legal Forum.

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